Case: EasyJet: Staying Ahead in the Pricing Game
Q1: How do easyJet’s marketing objectives and marketing mix strategy affect its pricing decision? EasyJet’s mission statement: to provide our customers with safe, good value, point-to-point air services. To effect and to offer a consistent and reliable product and fares appealing to lesuire and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers. Its objectives: low fares and high frequency between major Europeon airports consumers willing to pay more for value-added proposition growth based on joining the dots and adding frequency. With recognition for providing more efficient, low-cost flights, whilst maintaining as a high quality of services as possible, easyJet is positioning itself to its consumer base as the best form of budget travel in Europe. Price is a crucial positioning factor. Therefore, the marketing mix is based on keeping costs to a minimum to allow the airline to offer the lowest fares possible.
Q2: Discuss factors that have affected the nature of costs in the airline industry since 2000. How have these factors affected pricing decisions? Factors since 2000 are:
1- Heightened environmental consciousness: a) 2002’s world summit on sustainable development. b) Environmental taxes. c) Cleaner plane models/engines. 2- Information age: a) Broadband mainstream since 2000s. b) Introduction of advanced technology. c) Less cost for labor and infrastructure and less time incurred to complete the same job. 3- Terrorism: a) 9/11 attacks. b) Security procedures introduced. c) High-tech detection hardware. d) Higher costs incurred for safety and peace of mind. e) Aviation insurance. 4- Energy crisis: a) 2000s energy crisis. b) Rising cost of crude oil. c) Higher costs are translated to airline industry as jet fuel is processed from crude oil. d) Hedging policy reduces fuel cost...
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